Company Overview
Nanofilm Technologies International Limited is a Singapore-headquartered surface solutions specialist founded in 1999 and listed on the SGX Mainboard in October 2020. The company specialises in vacuum deposition technologies, particularly its patented Filtered Cathodic Vacuum Arc (FCVA) technology, serving diverse sectors including computers, communications, consumer electronics (3C), automotive, precision engineering, and semiconductors. With operations spanning Singapore, China, Japan, Vietnam, India, and Europe, Nanofilm provides critical coating solutions that enhance product durability and functionality.
Strong Performance Driven by Watch Programme Expansion
Nanofilm demonstrated robust momentum in the second half of 2025, with revenue climbing 13% year-on-year to S$137.4 million. This growth was primarily fuelled by new watch programmes from Customer Z, the company’s largest client representing one of the world’s most popular smartphone brands. Notably, Customer Z’s revenue contribution has been strategically diversified, decreasing from 78% during the company’s Mainboard listing to 60% currently, indicating improved customer diversification.
The company’s growth trajectory has been further supported by contributions from EuropCoating, a European semiconductor wafer carrier coating specialist, alongside increased demand for mould coaters used in optical lens applications. These developments highlight Nanofilm’s expanding market reach across multiple high-value segments.
Semiconductor and Automotive Expansion Plans
Looking ahead, Nanofilm targets double-digit growth in 2026 across its semiconductor, automotive, and industrial segments. The company expects to launch a new semiconductor programme this year, leveraging its FCVA technology for wafer lapping carriers. This application involves applying tetrahedral amorphous carbon (ta-C) layers to provide hard, low-friction surfaces ensuring stable wafer alignment during semiconductor manufacturing’s polishing stage.
Financial Recovery and Valuation Appeal
Nanofilm’s financial position has strengthened considerably, with free cash flow returning to positive territory at S$1.8 million in FY25 after two consecutive years of negative cash flow. This turnaround was driven by a remarkable 129% year-on-year surge in operating cash flow to S$48.6 million, supported by a 38% increase in profit after tax and an S$18.2 million improvement in working capital management.
The company trades at an attractive 1.2x price-to-book ratio, representing a significant 61% discount to the peer average of 3.1x, suggesting potential value for investors seeking exposure to advanced manufacturing technologies.
Frequently Asked Questions
Q: What is Nanofilm Technologies’ core business?
A: Nanofilm specialises in surface solutions based on vacuum deposition technology, particularly its patented Filtered Cathodic Vacuum Arc (FCVA) technology, serving sectors including 3C electronics, automotive, precision engineering, and semiconductors.
Q: How did Nanofilm perform financially in 2H25?
A: The company achieved 13% year-on-year revenue growth to S$137.4 million in 2H25, driven primarily by new watch programmes from its largest customer.
Q: Who is Customer Z and what is their significance?
A: Customer Z is Nanofilm’s largest client, representing one of the world’s most popular smartphone brands. They currently contribute 60% of Nanofilm’s revenue, down from 78% during the company’s listing, showing improved customer diversification.
Q: What drove the improvement in Nanofilm’s cash flow position?
A: FY25 free cash flow turned positive at S$1.8 million after two years of negative cash flow, driven by a 129% surge in operating cash flow to S$48.6 million due to higher profits and improved working capital management.
Q: What growth opportunities does Nanofilm see in semiconductors?
A: The company expects to launch a new semiconductor programme in 2026, targeting double-digit growth. Their FCVA technology is used for wafer lapping carriers, applying tetrahedral amorphous carbon layers for stable wafer alignment during polishing.
Q: How does Nanofilm’s valuation compare to peers?
A: Nanofilm trades at 1.2x price-to-book ratio, representing a 61% discount to the peer average of 3.1x, suggesting the stock may be undervalued relative to comparable companies.
Q: What are Nanofilm’s key coating technologies and applications?
A: The company offers FCVA, FCVA-hybrid, and tetrahedral amorphous carbon (ta-C) coating solutions applied to watch enclosures for durability enhancement and smartphone internal components to prevent short circuits.
This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst.
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